Tuesday Aug 25, 2026
Tuesday Aug 25, 2026
Tuesday, 25 August 2026 05:10 - - {{hitsCtrl.values.hits}}
More than 80% of the nearly Rs. 95 billion allocated for concessionary credit to micro, small and medium enterprises (MSMEs) and agriculture in 2026 has been utilised, with the amount exceeding Rs. 75 billion by the early part of the third quarter, according to the Development Finance Department of the Finance, Planning and Economic Development Ministry.
The Ministry said the financing package covers enterprise development, disaster relief, agriculture, and paddy-related lending, with the credit schemes implemented principally through State and private banks.
The latest progress also comes against the backdrop of the 2026 Budget’s broader push to improve access to finance for SMEs through Government-backed concessionary lending.
Of the package, Rs. 54.89 billion has been allocated to loan schemes targeting the MSME sector. Lending progress under schemes already in operation amounted to Rs. 37.58 billion, benefitting 6,832 borrowers and representing 68.5% of the total allocation.
Two facilities included within the MSME allocation, the Rs. 7.75 billion SME Sector Development Program and the Rs. 6.2 billion Sustainable Agriculture Program agricultural loan scheme, are scheduled to commence in 4Q 2026.
The RE-MSME PLUS scheme recorded the highest utilisation among the MSME facilities, with Rs. 25.99 billion extended to 2,645 beneficiaries against an allocation of Rs. 25.7 billion, equivalent to 101% of the allocated amount.
The Extended Disaster Relief Loan Scheme had provided Rs. 8.06 billion to 3,966 beneficiaries against an allocation of Rs. 9.3 billion, or 87%, while the SME Development Finance Project revolving loan facility had extended Rs. 3.53 billion to 221 beneficiaries against an allocation of Rs. 5.94 billion.
The Ministry said entrepreneurs affected by Cyclone Ditwah could obtain working capital of up to Rs. 25 million at an annual interest rate of 3%. More than 90% of the beneficiaries under the disaster facility were micro and small-scale entrepreneurs. The Rs. 25 million ceiling and 3% rate are also consistent with information previously provided to Parliament on the disaster credit facility.
Separate assistance has been provided to enterprises affected by the economic crisis that had fallen into the non-performing loan (NPL) category and could no longer obtain financing through the conventional banking system.
Under this initiative, Rs. 235 million in working capital loans has been provided to 70 entrepreneurs, while another 342 MSMEs that made use of the debt restructuring opportunity provided by the Government have entered into agreements with banks and resumed business operations.
Agriculture-related credit has recorded higher utilisation, with lending progress of Rs. 38.02 billion against a total allocation of Rs. 40.8 billion, equivalent to 93%.
A rural credit scheme accounted for the bulk of this lending, recording Rs. 25.94 billion in loans to 50,125 beneficiaries against an allocation of Rs. 25 billion, taking utilisation to 104%. The facility covers cultivation credit for 34 crops.
Another Rs. 11.56 billion had been extended to 451 beneficiaries under the pledge loan scheme for small and medium-scale rice millers and cooperative societies, equivalent to 77% of its Rs. 15 billion allocation.
The Ministry said around 70,000 metric tonnes of paddy had been purchased with financing provided under the scheme.
Separately, Rs. 7.5 billion has been allocated for the 2026 Yala season to implement the Government’s guaranteed paddy price policy through purchases by small and medium-scale rice millers and cooperative societies. Under the initiative, interest-free financing of up to Rs. 25 million is planned for paddy purchases, with funds to be channelled through the relevant District Secretaries.
The Government has also expanded collateral-free lending through the National Credit Guarantee Institution in collaboration with State and private banks. Guarantees worth nearly Rs. 9.65 billion have been issued for 2,143 loans, with a combined value of nearly Rs. 14 billion, covering all 25 districts.
The Ministry said more than 70% of total lending under the broader program had gone to provinces outside the Western Province. Significant cultivation lending had been directed to Anuradhapura, Polonnaruwa, Jaffna, and Hambantota, as well as Northern and Eastern districts including Mannar, Trincomalee, Batticaloa, and Mullaitivu.
Government-funded facilities under the program provide loans of up to Rs. 25 million at an interest rate of 5%, while an Asian Development Bank-supported facility provides financing of up to Rs. 50 million at an annual interest rate of 6%.
The schemes are administered by the Development Finance Department of the Finance, Planning and Economic Development Ministry in collaboration with 15 State and private banks and operate through a digital loan management system.
The Ministry said the SME revolving loan scheme also requires at least 20% of the number of loans to be provided to women entrepreneurs and a further 20% to young entrepreneurs.
With more than 80% of the overall allocation already utilised by 3Q, the Ministry said it was considering the possibility of increasing financial provisions for similar concessionary loan schemes in 2027.
